Malaysia's leading condom maker boosts investment in R&D

ERJ staff report (TP)

Kuala Lumpur, Malaysia − Condom makers have long battled to boost their use by debunking perceptions that they put a crimp in bedroom fun, reported Shie-Lynn Lim for The Wall Street Journal.

Malaysia-based Karex Bhd is hoping its latest round of investment will prove that condoms are both safe and fun, said Goh Miah Kiat, chief executive of the biggest condom manufacturer in a country that makes more condoms than any other.

As part of new expansion plans, Karex is investing 4m ringgit (€910,000) in research and development, up from 2.5m ringgit (€569,000) in 2012, to come up with a thinner condom that is both strong and durable. The new product will add to the company’s already extensive condom collection, which includes a smorgasbord of flavours, shapes and textures, Goh told the Wall Street Journal.

Karex is constantly on the lookout for “innovative new technologies to make sex better,” said Goh, pointing to one of the company’s newest innovations – a tattoo-like textured condom for enhanced stimulation.

Karex’s move to increase research spending comes on the heels of its impressive debut on Malaysia’s stock exchange on 6 November. On its first day of trading shares ended 32 percent higher than when the bourse opened, giving the company a market capitalisation of 665m ringgit (€151.3m).

Malaysia’s deals market, home to some of the world’s largest initial public offerings last year, has recently seen a revival of listings, months after a hotly contested general election.

In addition to R&D, Karex plans to invest some 42m ringgit (€9.5m) to double production capacity to six billion condoms a year by the end of 2015. That will be equivalent to 22 percent of the global condom market, which, by 2015, is forecast to reach 27 billion pieces.

That is a lot of rubber. But Goh’s aspirations go far beyond the numbers.

“While R&D is integral to Karex’s strategy, engaging with young people on practicing safe sex is just as crucial,” he said.

Significant progress has been made in recent years in addressing HIV infections, but about 4.6m people between the ages of 15 and 24 are living with the virus, and more than 2,400 young people are newly infected each day, according to a 2012 world AIDS day report by the Joint United Nations Program on HIV/AIDS, or UNAIDS.

Karex’s multi-coloured and flavoured condoms – durian and Pina Colada to name a few – are each stringently checked for holes, said Goh. Then they are sealed in attention-grabbing packages and shipped across the globe to countries such as China, Zimbabwe and Brazil. Government agencies including the United Nations Population Fund and the US Agency for International Development also receive Karex condoms and distribute them for free as part of safe-sex awareness campaigns.

Prior to condom manufacturing, Goh’s family started planting rubber trees in the southern Malaysian state of Johor in the 1960s. They expanded to processing when the commodity became commercially attractive as a raw material for tires, but later switched their focus to condom production with the founding of Karex in 1988.

The company started out making its in-house “Carex” brand of condoms for the Singapore and Malaysia markets. Today only 4 percent of its revenue is derived from that brand, while the remainder comes from the condoms that Karex manufactures for well-known names such as Durex.

“Ultimately, what matters most is getting our condoms out and getting across the message that sex can be safe and fun,” said Goh.

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Full story from The Wall Street Journal